Intus Care, Inc. v. RTZ Associates, Inc.

Background

Intus Care, Inc. described itself as a health analytics company that contracts with health care providers participating in the federal Program of All-Inclusive Care for the Elderly. Intus alleged that many of its clients stored patients’ electronic health data in PACECare, an electronic health-record program operated by RTZ Associates, Inc.

According to the amended complaint, Intus obtained PACECare data from June 2021 through September 2022 with the consent of its clients and RTZ. Intus alleged that RTZ then refused to provide access to the data, required at least one client to obtain standard export files manually, and later announced a competing analytics product. Intus alleged that RTZ was using its position as an electronic-medical-records provider to pressure current and potential Intus clients to end or avoid their relationships with Intus.

The original complaint asserted claims for intentional interference with contractual relations, intentional interference with prospective economic advantage, negligence per se, and violation of California’s Unfair Competition Law. After RTZ moved to dismiss the negligence-per-se and unfair-competition claims, Intus filed an amended complaint that removed the negligence-per-se claim and added factual allegations. RTZ then moved to dismiss only the claim for intentional interference with prospective economic advantage.

Legal Standard and Analysis

The court applied Rule 12(b)(6), which allows dismissal when a complaint does not state a legally recognized claim supported by sufficient factual allegations. The court also considered Intus’s argument under Rule 12(g)(2), which generally bars a party from making a later motion under Rule 12 based on an objection that was available but omitted from an earlier motion. The court explained that courts may nevertheless consider a later motion in the interest of judicial economy when rejecting it would cause unnecessary delay and expense.

Under California law, a claim for intentional interference with prospective economic advantage requires: an economic relationship with a probable future benefit; the defendant’s knowledge of that relationship; intentional acts designed to disrupt it; actual disruption; and economic harm proximately caused by the defendant’s acts. The challenged third element requires the defendant’s acts to be independently wrongful—that is, unlawful under some constitutional, statutory, regulatory, common-law, or other identifiable legal standard.

RTZ argued that Intus’s claim rested only on alleged “information blocking” prohibited by the 21st Century Cures Act, which provides for civil monetary penalties but does not provide Intus with a private right of action. The court rejected RTZ’s argument that the alleged violation could not be independently wrongful unless Intus could sue directly under the Act. Relying on California authority, the court held that a statutory violation can satisfy the independent-wrongfulness requirement even when the plaintiff lacks a private right of action under that statute. The court also noted that RTZ acknowledged the Act provides a formal complaint and enforcement process.

Disposition

The court held that alleged violations of the Cures Act were sufficient to allege the wrongful conduct required for Intus’s intentional-interference-with-prospective-economic-advantage claim. It did not decide whether the complaint sufficiently alleged other possible bases for the claim and stated that the parties could address the claim’s scope during discovery. Judge Jon S. Tigar denied RTZ Associates, Inc.’s motion to dismiss.